I recommend the book as a very incisive and insightful challenge to any facile and uncritical identification of the Christian faith with particular political and economic ideologies.

Here’s a snippet of the review:

[Trueman’s] project is not about demonizing capitalism, wealth, or profits one the one hand, or political power on the other. It is about putting the pursuit of profit and power in its proper place. Thus what he writes about the market applies equally well to the government: “no economic system, least of all perhaps capitalism, can long survive without some kind of larger moral underpinning that stands prior to and independent of the kinds of values the market itself generates.” It is in this larger and prior system of belief and action, the Christian faith, that we are to seek our primary identity and unity, and in pursuit of this Trueman’s book is a bracing and worthwhile effort.

I have been saying in various venues for quite some time now that Trueman’s book can be read as a kind of complement to my recent book, Ecumenical Babel: Confusing Economic Ideology and the Church’s Social Witness. But whereas Trueman’s proximate context is the conflation of conservative politics and the Christian faith by evangelicals, my book’s context is the conflation of progressive politics and the Christian faith by mainline ecumenists.

But both books share a basic thesis that, in Trueman’s words, “The gospel cannot and must not be identified with partisan political posturing.”

The Hastert Center at Wheaton College will host a debate tomorrow night between Jim Wallis, president of Sojourners, and Arthur Brooks, president of the American Enterprise Institute, on the question, “Does Capitalism Have a Soul?” Washington Post columnist Michael Gerson will moderate.

“It’s a good chance to compare different visions of capitalism and market economies, and to discuss the role of government in those economies. There is a lot of debate on these issues in secular venues, but this is a chance to hear two people who have a spiritual common denominator address complicated issues related to economic systems, and that’s a rare event.”

In the “Wealth Inequality Mirage” on RealClearMarkets, Diana Furchtgott-Roth looks at the campaign waged by “levelers” who exaggerate and distort statistics about income inequality to advance their political ends. The gap, she says, is the “main battle” in the Nov. 2 election. “Republicans want to keep current tax rates to encourage businesses to expand and hire workers,” she writes. “Democrats want to raise taxes for the top two brackets, and point to rising income inequality as justification.”

This is a constant refrain from the religious left, which views the income or wealth gap as evidence of injustice and grounds for reforming political and economic structures. In the video posted here, you’ll see Margaret Thatcher, in her last speech in the House of Commons on November 22, 1990, brilliantly defending her policies against the same charge.

Furchtgott-Roth zeroes in on a recent interview with Robert Reich, Secretary of Labor for President Bill Clinton and now a professor at the University of California, Berkeley.

[Reich said:] “Unless we understand the relationship between the extraordinary concentration of income and wealth we have in this country and the failure of the economy to rebound, we are going to be destined for many, many years of high unemployment, anemic job recoveries and then periods of booms and busts that may even dwarf what we just had.”

Mr. Reich is wrong. He and other levelers exaggerate economic inequality, eagerly, because they rely on pretax income, which omits the 97% of federal income taxes paid by the top half of income earners and the many “transfer payments,” such as food stamps, housing assistance, Medicaid and Medicare. This exaggerated portrait of inequality undergirds the present effort by the Democrats to raise income tax rates for people with taxable incomes of $209,000 a year on joint returns and $171,000 a year on single returns.

A more meaningful measure of inequality comes from an examination of spending. On Wednesday the Labor Department presented 2009 data on consumer spending, based on income quintiles, or fifths. This analysis shows that economic inequality has not increased, contrary to what the levelers contend.

Much of the discussion around this issue from the left uses the data to portray America as a heartless land of haves and have-nots. Here’s a quote from a Sept. 28 AP story on new census data, including income figures:

“Income inequality is rising, and if we took into account tax data, it would be even more,” said Timothy Smeeding, a University of Wisconsin-Madison professor who specializes in poverty. “More than other countries, we have a very unequal income distribution where compensation goes to the top in a winner-takes-all economy.”

Here’s an amazing statistic: The average 2009-10 faculty salary at Wisconsin Madison was $111,100. But the median household income for all Americans in 2007 (a roughly parallel comparison) was just over $50,000. Isn’t something out of whack here? Isn’t this evidence of severe economic injustice demanding structural reform? Sounds to me like the Bucky Badger faculty has been helping itself to second and third helpings at the “winner-take-all” buffet.

The faculty at Prof. Reich’s school do even better on average income: $145,800. I suspect some celebrity professors might even be … above average.

… recent events have added nothing that we did not know before or, more accurately, should have known as social scientists or otherwise as people attentive to empirical evidence. The crucial fact here, of course, is the vast superiority of capitalism in improving the material standards of living of large numbers of people, and ipso facto the capacity of a society to deal with those human problems amenable to public policy, notably those of poverty. But, if this fact had been clear for a long time, recent events have brought it quite dramatically to the forefront of public attention in much of the world, and by no means only in Europe. It is now more clear than ever that the inclusion of a national economy in the international capitalist system (pace all varieties of “dependency theory”) favors rather than hinders development, that capitalism remains the best bet if one wishes to improve the lot of the poor, and that policies fostering economic growth are more likely to equalize income differentials than are policies that deliberately foster redistribution.

[ … ]

… to opt for capitalism is not to opt for inequality at the price of growth; rather, it is to opt for an accelerating transformation of society. This undoubtedly produces tensions and exacts costs, but one must ask whether these are likely to be greater than the tensions and costs engendered by socialist stagnation. Moreover, the clearer view of the European socialist societies that has now become public radically debunks the notion that, whatever else may have ailed these societies, they were more egalitarian than those in the West: they were nothing of the sort. One must also remember that, comparatively speaking, these European societies were the most advanced in the socialist camp. The claims to greater equality are even hollower in the much poorer socialist societies in the Third World (China emphatically included).

Whittaker Chambers began Witness, the classic account of his time in the American Communist underground, with the declaration: “In 1937, I began, like Lazarus, the impossible return.” The line was most of all a deep recognition of the power of God to redeem what was once dead. Witness was a landmark account of the evils of Communism but most importantly a description of the bankruptcy of freedom outside of the sacred. “For Chambers, God was always the prime mover in the war between Communism and freedom. If God exists then Communism cannot,” says Richard Reinsch II. And it is Reinsch who reintroduces us to Chambers, the brilliant intellectual, anti-communist, and man of faith in Whittaker Chambers: The Spirit of a Counterrevolutionary.

After his exodus from the Soviet Communist spy network in Washington, Chambers then outed U.S. State Department official Alger Hiss as a communist, setting up a dramatic espionage trial played out before the nation. Chambers became a household name thanks to a trial that was wrapped in intrigue, treachery, and Cold War drama. Chambers would become a hero for many in the conservative movement. William F. Buckley, Jr. called him the greatest figure who defected out of communism. But Chambers’ pessimism about the future of the West led him to be dismissed by many others, conservatives too.

This pessimist view of the survival of the West against Marxism stems from Chambers’ understanding that the West was abandoning its sacred heritage of Christian thought, and within it, the proper understanding of man. A supposedly free but rampant secular and materialistic society still leads to the same ending as Marxism, outside of God, and unable to explain its reason and purpose for life.

One of the chief takeaways from this book is that there must be more to conservatism than free-markets and limited government. For liberty to be prosperous it must be oriented toward greater truths. Reinsch points out that Chambers understood that the “West must reject Communism in the name of something other than modern liberalism and its foundation in the principles of Enlightenment rationalism.”

Reinsch delves into Chambers prediction of the eventual collapse of the West and his belief that there was a lack of moral fortitude to combat the communist surge. The apparent unwillingness of the free world to sacrifice and suffer for freedom troubled Chambers. He also surmised that the intellectual class possessed a waning ability to articulate a meaningful defense of the ideas and value of the free society.

The United States did indeed emerge as the leader of the free world after the Second World War, rebuilding its former enemies with the Marshall Plan and other programs. Early on, the United States and Western Europe showed a stoic and moral resistance throughout the Berlin Airlift of 1948 and 1949. Future presidential administrations would pledge support for free people who toiled anywhere across the globe. President Ronald Reagan emerged in the latter half of the 20th Century, unveiling his own crusade against communism, making many of the deeper spiritual contrasts with the Soviet system first articulated by Chambers.

Reinsch also notes that while Chambers perhaps underestimated some of the spiritual will and capital to resist and overcome the Marxist onslaught, most of Chambers’s identification of the sickness of the West remained true. Reinsch declares of an America in the 1960s and 1970s:

Racked by mindless violence, strikes, rampant inflation, economic torpidity, and the rapid unfolding of sexual liberation, liberal democracy seemed to display, in acute form, the crisis of a material progress that had been severed from faith and freedom. Thus, the spirit of Chambers’s brooding over the fate of the West retained relevance.

This is evidenced in part by the immense suffering of Hanoi Hilton POWs like Admiral Jeremiah Denton, who in his captivity memoirWhen Hell Was in Session, described the disconnect of a man who sacrificed so much for freedom and who came out of the dark night with a deep sense of spiritual renewal only to come home to unearth an increasingly secular nation that was also retreating in its ability to defend and define its greatness.

Reinsch even points to further evidence that Chambers was right about the dangerous trajectory of the West when he cites the victory of the Cold War and how that surge of freedom did not posit any great change or realization of a higher transcendent understanding and purpose. While the superiority of markets was temporarily buoyed by the events, socialism has shown a staying power in the West.

Reisnch has crafted an important and essential book for anybody fatigued with the daily grind of hyper-partisan politics. By reintroducing conservatives to a deep thinker like Chambers, he reminds us of the limits of politics as well as the frustrating shallowness it can embody.

Just as markets and small government offer little ability in offering peace and happiness, though they certainly create greater space for a working towards that end, this account is a reminder that the best of conservatism is at its core within the ancient truths that tower above the vain materialism and individualism of secular Western democracy.

Believers can see this clearly when they look at the vanity of a society that prods, primps, and chases after meaning outside of God. Thus, as Reinsch adds, Chambers so wholly understood that “man’s problem was the problem of understanding himself in light of his fundamental incompleteness.” And that problem exists under communism just as it does in democratic capitalism, with its temptations to consumerism and selfishness.

The Marxist Utopian dream was man’s attempt at trying to fulfill its incompleteness with all the wonders and technology of modernity and materialism. The free world still is unable to relocate itself in the proper order. And, as Reinsch declares, this is a great warning to us all. Chambers so thoroughly understood and knew that “man was never more beastly than in his attempts to organize his life, individually and collectively, without God.”

Critics of capitalism often argue that this economic system is irretrievably tainted by the sin of greed. They claim that by empowering government to “spread the wealth around” we can free ourselves from the tyranny of greed, purging the influence of sin. But are they right? At this event, Victor Claar, associate professor of economics at Henderson State University, will discuss the role of envy in collectivist and redistributive economic systems. Beginning with an explanation of the classic theological understanding of envy, Claar will argue that “grieving the good of others” is an unavoidable aspect of social democracy.

As Dr. Claar will elaborate, the question that epitomizes envy, which is defined as “sorrow at another’s good,” is the self-centered concern, “What about me?” For fans of the hit TV series Lost, I can think of no better illustration of this than the turn from envy to malevolence in this climactic confrontation between Ben Linus and Jacob from the conclusion of season 5:

Until recently, many thought that Europe had escaped the worst of the 2008 financial crisis. Some even argued that the crisis has demonstrated the European social model’s superiority over “Anglo-Saxon capitalism”. In 2010, however, we have seen an entire country bailed out, riots in Athens, governments slashing budgets, and several European nations staring sovereign debt default in the face. Some are even claiming that the euro is finished. So what went wrong for Europe? How adequate have been the responses of European governments? And what are the consequences for America? The video is from the Aug. 2 Acton Lecture Series in Grand Rapids, Mich.

Forgive the blunt title of this blog post, but the point needs to be made in no uncertain terms.

The Zenit News Agency has interviewed John Medaille, author of Toward a Truly Free Market: A Distributist Perspective on the Role of Government, Taxes, Health Care, Deficits, and More, which calls for a direct if brief (more later, perhaps – I have yet to read the book) response from this Catholic defender of the market economy.

Whether or not Pope Benedict’s Caritas in Veritate is a boon to “alternative economics” as the Zenit interviewer claims, the market economy has come under attack from just about every corner since the global financial crisis of 2008. It’s easy enough to kick a system when it’s down, even when there’s plenty of blame to go around. Some critics, however, have been suffering through many decades of capitalist triumphalism to get their revenge. Among these are the distributists.

As I’ve noted in some recent blogposts, distributism has its origin in the writings of G.K. Chesterton and Hilaire Belloc who, for the brilliant Catholic apologists they were, seem to have known very little about economics. As the Zenit interviewer remarks, “many are skeptical, and believe distributism is simply romantic agrarianism, or worse, just an aesthetic sensibility, without any real practical solutions.”

Identified as a “neo-distributist,” Medaille wants to make up for the deficiencies of his fathers. He takes economics more seriously and argues that distributism is the “truly” free-market system compared to capitalism or socialism, though it should be remembered that Chesterton and Belloc also supported distributism in the name of economic liberty, private property and less interference from the state. Be that as it may. The question is ultimately whether distributism, neo- or paleo-, lives up to its claims as an “alternative” or “third-way.”

Medaille starts by critiquing the related notions that economics is a physical, rather than a human, science and that economics has nothing to do with ethics, especially justice. I don’t know who he is debating here. When I studied economics as an undergrad at a large secular university and worked as an international economist for the U.S. government, I may have come across such types, though no one was so brash to say that ethics didn’t matter. But it definitely does not describe those of us who appreciate Austrian economics and promote a Catholic understanding of the market economy.

More to the point, the question is how economics as a human science is to “practice” justice. How exactly can an economic system ensure justice between a buyer and a seller who come to a common agreement? Doesn’t the virtue of justice require just persons? And isn’t legal justice the purview of the state that legislates against force, fraud, theft, etc.?

For an example, Medaille says that, in matters of trade, foreign financing of domestic consumption is impoverishing to both parties and presumably unjust. While I could be convinced of its imprudence or undesirability in certain situations, I fail to see why or how such financing is always and everywhere unjust and therefore deserving of a blanket condemnation.

Medaille then states his case for distributism as the truly free-market system compared to capitalism and socialism. He makes the obvious point that any system that concentrates power is bound to leave individuals worse off and less free. Socialism is clearly guilty as charged but does capitalism necessarily lead to greater concentrations of economic power? The problem of concentrated power mainly occurs when corporations and the state work together – a.k.a. corporatism – which hardly describes a market economy worth defending and may even resemble the distributist model.

A truly free-market economy must allow free competition; it is only when capitalists collude to restrict competition that power is concentrated and freedom restricted. Yet this is precisely what guilds seek to do. Or have the neo-distributists distanced themselves from Chesterton and Belloc’s defense of guilds and critique of competition and advertising? I cannot tell.

Medaille is on firmer ground when he reminds us that the government should be doing less and that government interference often leads to the concentration of power. But he then ruins his case by looking to the state and trade associations to collude, which seems to be acceptable so long as it all happens at a local level.

Medaille explicitly proposes using tax policy, property law, licensing authorities and other political means to the advantage of some over others. But how is local government somehow exempt from draconian or overly restrictive interference? In fact, the history of republican government is full of such examples, especially in cases where an obstinate minority asserts its rights against the majority. The concentration of power often begins “small”, “locally” or “popularly” and grows from there; see Hayek’s The Road to Serfdom for a well-known demonstration of the phenomenon.

In the end, I am left wondering just what the distributists think is so good about economic freedom. As far as I can tell, it is not about using our God-given skills and talents through the division of labor for the benefit of all, and I see absolutely no mention of poverty reduction, longer life expectancies, medical and technological advances, the social virtues encouraged by commerce, and other goods brought about by economic freedom. The distributist vision of economic liberty and private property seems to feed a misguided notion of self-sufficiency and pride that is as antithetical to Catholic social teaching as materialism and consumerism.

Furthermore, the neo-distributist case for free markets is riddled with the same contradictions and problems that plagued its predecessor. Making the case against socialism and a mythical laissez-faire state of affairs is simply not good enough these days. Instead of urging serious Catholics and others who take ethics seriously to seek new economic models or “lifestyles,” why not encourage them to understand how markets work and what moral freedom and responsibility require from us as citizens and in the marketplace?

This last contribution comes from Prof. Jeffrey Langan, chairman of the Liberal Studies Department, Holy Cross College at Notre Dame University. Langan’s argument is that the victory of capitalism over communism and fascism in the 20th century has blinded us to the serious defects and “real injustices that are part of its foundation, history, principles, and ethos.”

Langan argues that capitalism is based on a “subtly dangerous materialism,” that the greatest period of capital formation took place as a result of King Henry VIII’s theft of Church property, that self-interest is simply a euphemism for avarice, that capitalism promotes usury and the rule of the strong over the weak, and lowers the wages of the workers. Not content to stick to these very negative economic consequences, Langan then asserts that capitalism promotes “the widespread use of birth control, abortion, easy divorce, and now gay marriage. Children in proudly capitalist families are frequently beset with alcohol, drug and sex addictions.” He concludes that “[c]apitalism is not compatible with the principles of equitable human development” and that we are better off avoided the term “capitalism” as such.

These are bold accusations to make, especially in such a short commentary, and even more so when they are made without a shred of evidence. (Langan writes that footnotes are available upon request, but he has yet to reply to my request for them.) Though he does not use the term “distributist,” it seems that Langan has been strongly influenced by the critique of capitalism offered by that school of thought, the problems of which have been dissected by Thomas E. Woods Jr. in the 2008 Acton monograph Beyond Distributism, in an Acton University Lecture I gave in June, and partially taken up in a previous blog post of mine.

Without the footnotes, it is difficult to refute Langan’s core arguments about the theory and history of capitalism. Part of me wants to think that Langan is being deliberately provocative, exaggerating his case of rhetorical effect, or even arguing tongue-in-cheek. But if Langan truly believes that supporters of capitalism are blind to its defects, he is purposely ignoring what Catholic social teaching had to say about capitalism, and especially Pope John Paul II’s qualified acceptance of an ethical form of capitalism in the 1991 encyclical Centesimus Annus (see especially n. 42) as well as his preference for terms other than “capitalism” to describe the market/free/business economy. More recently, Pope Benedict XVI has also gone to great lengths to recall the benefits as well as the challenges of economic globalization in last year’s encyclical Caritas in Veritate (see, again, n.42).

What is even more damning of Langan’s critique of capitalism is that it provides cover for those who wish to deny the connection of human freedom and responsibility that is the result of our God-given dignity. If human beings are simply driven by their desire for even-increasing amounts of material goods and do not posses the ability to say “no” or even “enough,” then there really is no responsible use of freedom and we would be nothing other than clever animals. It can and should be admitted that an unethical form of capitalism can treat people as nothing more than consumers. But if this is the anthropology at the root of capitalism, if human beings are not capable of living freely and responsibly, why shouldn’t we opt just as easily for those 20th-century ideologies of communism or fascism? Do we favor capitalism just because it gives us more stuff and makes fewer demands of us? Far from being a dangerous idea, ethical capitalism is what we need now more than ever.

I think that the oppression threatening democracies will not be like anything there has been in the world before….

I see an innumerable crowd of men, all alike and equal, turned in upon themselves in a restless search for those petty, vulgar pleasures with which they fill their souls….

Above these men stands an immense and protective power which alone is responsible for looking after their enjoyments and watching over their destiny. It is absolute, meticulous, ordered, provident, and kindly disposed. It would be like a fatherly authority, if, fatherlike, its aim were to prepare men for manhood, but it seeks only to keep them in perpetual childhood; it prefers its citizens to enjoy themselves provided they have only enjoyment in mind. It works readily for their happiness but it wishes to be the only provider and judge of it. It provides their security, anticipates and guarantees their needs, supplies their pleasures, directs their principal concerns, manages their industry, regulates their estates, divides their inheritances….

Thus, it reduces daily the value and frequency of the exercise of free choice; it restricts the activity of free will within a narrower range and gradually removes autonomy itself from each citizen. Equality has prepared men for all this, inclining them to tolerate all these things and often even to see them as a blessing.

Thus, the ruling power, having taken each citizen one by one into its powerful grasp and having molded him to its own liking, spreads its arms over the whole of society, covering the surface of social life with a network of petty, complicated, detailed, and uniform rules through which even the most original minds and the most energetic of spirits cannot reach the light in order to rise above the crowd. It does not break men’s wills but it does soften, bend, and control them; rarely does it force men to act but it constantly opposes what actions they perform; it does not destroy the start of anything but it stands in its way; it does not tyrannize but it inhibits, represses, drains, snuffs out, dulls so much effort that finally it reduces each nation to nothing more than a flock of timid and hardworking animals with the government as shepherd.

I have always believed that this type of organized, gentle, and peaceful enslavement just described could link up more easily than imagined with some of the external forms of freedom and that it would not be impossible for it to take hold in the very shadow of the sovereignty of this people.

Among the various lectures, there was one in particular that struck me as particularly relevant to the work of the Acton Institute. Peter Klein, professor of economics at the University of Missouri, delivered a presentation on entrepreneurship, a large part of the focus of his academic work.

Dr. Klein approaches the subject of entrepreneurship from the more realistic Austrian perspective. Rather than viewing people as examples of the homo economicus, as almost robotic, quantitatively-driven machines, Dr. Klein views human beings as unique and free actors. When we act, we do so under conditions of time and uncertainty. Though every human action presupposes cause and effect, there is no guarantee that our instincts are correct or that our efforts will pay off. In this way, every one of us, whenever we choose some action, is a kind of entrepreneur. In the face of uncertainty, we have an intended – but not guaranteed – result of action.

Combine that with the Austrians’ very realist take on production: production is not some kind of abstract graphical function, but the concrete act of taking a natural resource (e.g. some wood, a stone, some metal ore), and using one’s labor – almost investing a part of oneself – to physically transform it.

In a very broad sense, we all participate in this two-sided entrepreneurial action: actively and consciously transforming the world around us, and doing so in the face of uncertainty and imperfect knowledge.

In a much more specific sense, this activity applies to the people we would usually call entrepreneurs (Ludwig von Mises called them, “entrepreneur-promoters”). These are the businessmen we all know: the small-business owner, the investment banker, the risk-taker. These are individuals whose entrepreneurial spirit in a special way exceeds those of everyone around them. They are the ones willing to take on greater risk, confront greater uncertainty, and make more difficult decisions.

In any case, I find that this realistic description of the role of entrepreneurship fits extremely well with the theology in The Call of the Entrepreneur. In the film, we learn that the entrepreneur is a “co-creator”: He participates in the act of transforming raw materials and natural resources into products for consumers; but the entrepreneur does so by investing time and energy into the production process. And creativity and imagination play an indispensable role in this process of co-creation.

I remember a kind of feeling of awe when this thought dawned on me during Dr. Klein’s lecture. Here we find yet another example of how the market process, when understood and employed correctly, is not simply a morally indifferent result of choice, but a morally positive thing. Society and its consumers are made better off, and both the laborer and the entrepreneur are reminded of their human dignity as they participate in God’s work of fashioning the world.